ABOYNE – Looming cuts to provincial transfer payments have Wellington County councilors concerned about the impact on municipal budgets for 2019 and beyond.
In a letter to municipalities sent Dec. 21, just before most municipal offices closed for the Christmas break, the provincial government indicated grant announcements would be delayed for the Ontario Municipal Partnership Fund (OMPF), which provides a significant portion of municipal revenue.
During a Jan. 7 budget presentation, county treasurer Ken DeHart told councillors he was projecting the county’s OMPF allocation for 2019 at $1.4 million, down about 16 per cent from 2018.
“How confident are you that we’re going to get one-point-four from OMPF?” asked Mapleton Mayor Gregg Davidson.
“Not very,” DeHart responded.
He explained the province stated the OMPF program is “under review” and they were taking their time to review it, but that the funding envelope would decrease.
“This has been a trend for the last quite a few years … it’s no surprise,” said DeHart, adding the county has lost about $3 million in annual OMPF funding since receiving a high of $4.47 million in 2012.
DeHart said there is no way to be sure what municipalities will get through OMPF from one year to the next, but the county has been assuming it will be cut by about 15% each year.
While the cut does impact the tax levy, DeHart said the county has contingencies to absorb some loss of funding.
If the county receives less than $1.4 million, the municipality could drop plans to make a similar-sized contribution to a supplementary tax stabilization reserve fund.
“So if this drops, we would just not make that transfer,” he said.
Erin Mayor Allan Alls said he has written to both provincial finance minister Vic Fedeli and Premier Doug Ford about the pending reduction to OMPF.
“They lost track somewhat of why this fund came to be in place,” said Alls, noting the original intent was to assist municipalities with the cost of downloaded provincial services.
“These were things that were downloaded by the Mike Harris government … It’s a significant amount of money that each member municipality is going to lose,” said Alls, who urged other municipalities to send letters as well.
Alls said the province took a hard look at OMPF during a line-by-line review of provincial books conducted after the election last fall.
“That turned out to be one of the biggest amounts of money that they think that they can steal back from us,” Alls stated.
“One of the things that we really have to do is let the province know where the county stand on this,” said Warden Kelly Linton.
Guelph-Eramosa Mayor Chris White said Association of Municipalities of Ontario representatives recently met with provincial officials, including municipal affairs minister Steve Clark.
White said AMO’s position is, “This, of all the funding transfers you give to municipalities, the county included, this is huge. This is like the gas tax federally. It’s kind of the minimum the province can give us. And this is really a commitment (the province) made during the download to try and offset the massive impacts to the property tax.”
White urged member municipalities to be specific in raising concerns with the province.
“If you say ‘This is eight per cent of my property tax, etc.,’ it resonates,” he said.
White reminded councilors that although the cuts were coming from the province, municipalities would be delivering the bad news to taxpayers.
“You’re going to be blamed for it, because it’s your local taxes that are going to be going up,” said White.
“And the other thing is you get a two or three percent increase for no improvement in services … you’re just transferring money to the property tax, which is regressive because it should be on the provincial tax base which everybody pays into.”
“This is a cumulative thing … it’s not just a one year hit,” he added.
“That’s the real angle here: core services, roads and bridges. You can’t afford them now when you’ve got a $30,000 deficit locally. If you cut this, that’s just going to continue to grow and that impacts your economic development.”
Minto Mayor George Bridge agreed municipalities should speak out.
“But I think you have to go as a single voice,” he said.
“Even at the county level it affects us. But at the county level we have a bit better ability to absorb it than at the local level,” Bridge added. “If we end up with a three per cent increase overall and you didn’t get any benefit, you couldn’t do anything more, people will pound us for that.”
Councillor Doug Breen suggested a lack of institutional memory is at the root of the problem.
“There’s just no MPPs left that were around at the time of amalgamation. All the staff is basically gone,” said Breen.
“It’s just a fundamental lack of corporate memory and quite frankly they need to be reminded of what this fund was for. And it was this party that did this (downloading).
“It isn’t like they can say this was a Liberal initiative, this was the NDP – this was a Conservative initiative, it was this party that did this.”
“This is like being in the 20th year of your 25-year mortgage and forgetting why you did it in the first place and just saying ‘I’m not paying the bank anymore.’ That’s not the way it works,” said Breen.
“This deal was made, we’re going to push all this stuff down to you, we’re going to mess around with the farm tax rebate, we’re going to mess around with the conservation authorities – they did all this stuff, ‘but don’t worry we’ll take care of you’ and they need to be reminded of their responsibilities.”
Before council passed a resolution directing letters be sent to provincial ministers asking the government to maintain transfer funding, White urged councillors to be cautious in their individual approaches.
“If you are talking to your MPPs we need to be respectful. I mean they’re not obliged to give us any of this,” he said. “So just have a nice rational conversation. They read the papers. They get the press, you don’t want to be beating them up because they’ve got problems as well. So just be respectful.”
White told council he would be urging the Rural Ontario Municipal Association to express concern about the proposed cuts as well.
